Washington—Some much needed heart warming news out of Washington today. In its monthly tally of total U.S. retail sales, the U.S. Department of Commerce reported today that overall sales edged up last month, beating economists’ expectations.
Overall retail sales rose 0.2% last month to some $431.9 billion. Meanwhile economists had expected only a 0.1% increase.
Auto sales, which had a banner year in 2013, sank 1.8%, a slowdown likely due to bad weather.
Clothing, Accessories Sales Rise
Excluding auto sales along with gasoline, building materials and food services, retail sales were even better, rising 0.7% after a 0.2% increase in November. These so-called core sales, which account for the consumer spending portion of the gross domestic product, indicate that there is some momentum in the economy the final weeks of 2013.
Of the 13 major merchant categories tracked by the Commerce Department, seven reported gains. Notably, clothing and clothing accessories stores’ sales increased 1.8% from November while unadjusted year-over-year sales were up 5.2%. Economists speculated that the cold weather in December may have helped spur apparel sales, yet increased promotions may have eaten at retailers’ profits on those sales.
Sales in consumer electronics, health, groceries, and personal care stores all increased, while furniture and appliances, building and garden stores posted decreases.
“If you look at what lifted spending–food, gasoline, clothing, online shopping– are all things you can expect to increase when the weather is bad,” said Joseph LaVorgna, chief U.S. economist at Deutsche Bank. “Harsh weather could have hurt some of the bigger discretionary items.”
Nonstore retailing, which includes e-commerce, posted yet another monthly increase, up 1.4% (up 9.9% compared to December 2012). But general merchandise stores were basically flat while department store sales fell 0.7%.
Total retail sales for 2013 were up 4.2% from the prior year, a slowdown from 2012′s 5.4% pace and 2011′s 7.5% gain, the Commerce Department said.
Peter Boockvar, chief market analyst at the Lindsey Group, said, “Retail sales in December were better than forecasted but if we include the November downward revisions, the two months taken together are about in line.”
“Bottom line, because the December beat was offset by the November miss, Q4 GDP estimates should not change on this number,” Boockvar added.